United Technologies Corp. (UTX:US) and the Pentagon have reached an “agreement in principle” for the company to produce the next batch of engines for the F-35 fighter, the Defense Department’s largest weapons program.
The company’s Pratt & Whitney unit will supply 32 engines, spare parts and engineering support for the fifth lot of the Joint Strike Fighter made by Lockheed Martin Corp. (LMT:US), according to a Pentagon statement.
The Pentagon didn’t announce a value for the contract. The Pentagon estimates that engine work on the F-35 is valued at about $63.8 billion of the $395.7 billion research and acquisition program for the fighter.
“Reaching this agreement is fair and beneficial to the government and Pratt & Whitney,” said Lieutenant General Chris Bogdan, the Pentagon’s F-35 program executive officer. “Engine prices have decreased, and I appreciate everyone’s commitment to drive cost out of the program.”
Matthew Bates, a spokesman for Pratt & Whitney, said in an e-mailed statement that “we offered significant cost reduction over” the fourth production contract, and “we leaned forward to assume 100 percent risk for any cost overruns.”
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